Technical Signals Point to Potential Downturn in USDCAD

Central Bank

Economic

Summary:

If USDCAD fails to break above the right shoulder and post a new higher high, price could resume lower, with the next key support seen near 1.3758.

SELL USDCAD

Close Time

CLOSED

1.38330

Entry Price

1.37600

1.39100

1.38226 +0.00079 +0.06%

53.2

Pips

Profit

1.37600

1.37798

Exit Price

1.38330

Entry Price

1.39100

U.S. Consumer Price Index (CPI) inflation picked up again in August, with headline CPI rising to 2.9% year-over-year while core CPI held steady at 3.1%. The recent relief from falling gasoline prices is being offset by renewed price pressures in housing and food costs. At the same time, consumer goods such as electronics and clothing are climbing in price as the tariffs imposed by the Trump administration begin to filter through to consumers’ wallets.

Money markets in the U.S. have now fully priced in three quarter-point rate cuts from the Federal Reserve (Fed) before year-end. The Fed is widely expected to deliver an initial 25 basis point cut at its policy meeting next week, with markets also fully anticipating two additional rate cuts at the Federal Open Market Committee (FOMC) meetings scheduled for October and December.

Adding to the softening tone, initial jobless claims for the week ending September 6 jumped to 267K, far above the consensus forecast of 235K and notably higher than the prior reading of 237K. This sharp rise underscores renewed weakness in the labor market, which could reinforce the case for the Fed to act sooner rather than later.

According to CME’s FedWatch Tool, interest rate futures traders are fully pricing in three rate cuts by year-end. A 25 basis point cut is viewed as virtually certain at the upcoming September 17 FOMC meeting, while the probability of additional rate cuts on October 29 and December 10 is now hovering near 95%.

Meanwhile, Canadian money markets remain firm, with Canadian bond yields easing midweek and helping to provide some support to the Loonie on Thursday. Still, Canada’s economy appears to be in the early stages of a recession, and economic indicators continue to point toward further monetary easing from the Bank of Canada (BoC) on the horizon.

Canada’s Ivey PMI dropped sharply from a robust 55.8 in July to 50.1 in August, just above the stagnation threshold, signaling a marked slowdown in economic activity. This deterioration has intensified concerns about the resilience of Canada’s economy and is increasing the likelihood of a dovish shift from the BoC. Technical Signals Point to Potential Downturn in USDCAD_1

Technical Signals Point to Potential Downturn in USDCAD_1

Technical Analysis

USDCAD is currently shaping a head-and-shoulders formation, with the pair in the process of building the second shoulder. Depending on how this pattern develops, it can be either bullish or bearish — but in this case, the setup leans bearish. If USDCAD fails to break above the right shoulder and post a new higher high, price could resume lower, with the next key support seen near 1.3758.

The 100-period and 200-period moving averages on the 4-hour chart are positioned at 1.3818 and 1.3802 respectively. A clear break below these levels could accelerate downside momentum and confirm the start of a broader corrective move. Meanwhile, the RSI recently peaked at 68, just shy of overbought territory, suggesting that momentum could soon reverse. A new leg lower from current levels would align with this overextension, whereas a breakout above the right shoulder would invalidate the bearish setup and open the door to further gains.

Trading Recommendations

Trading direction: Sell

Entry price: 1.3833

Target price: 1.3760

Stop loss: 1.3910

Validity: Sep 19, 2025 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Central Bank

Commodity

Summary:

Gold consolidated around USD $3,620 on Thursday. An optimal cocktail of political uncertainty, escalating geopolitical risk and firmly-anchored Fed-rate-cut expectations continues to underpin the gold. We expect bullion to remain bid through the remainder of 2025.

BUY XAUUSD

EXP

EXPIRED

3626.00

Entry Price

3850.00

3567.00

4200.58 +2.67 +0.06%

Pips

EXPIRED

3567.00

3780.24

Exit Price

3626.00

Entry Price

3850.00

Fundamentals

The recent record-high print has been driven by a “risk-off” narrative centred on sticky inflation, ballooning sovereign debt and a visibly cooling US economy. Since April, the scaling-back of speculative length, juxtaposed with constrained supply and concurrent uptick in end-user demand, is poised to exert incremental upward pressure on the gold price.

ETF flows—particularly those of Asian-listed vehicles—remain a pivotal swing factor for gold. Any re-acceleration of inflow momentum would provide an additional tail-wind to prices; we therefore raise our 12-month target to USD 3,850.

A persistently accommodative monetary-policy backdrop is universally regarded as enhancing gold’s carry-adjusted attractiveness, having already propelled the metal almost 6% higher since early September. After such a pronounced rally, however, the market is vulnerable to a tactical pullback: the up-trendline drawn from the May low has been violated and longs are treating the all-time high of USD 3,657 as an opportune profit-taking level.

Meanwhile, the RSI is on the verge of printing a bearish divergence. Given the steepness of the rollover, a corrective move toward the psychological USD 3,550 mark is in play.

In sum, although gold’s upward momentum is showing early signs of fatigue, the market’s structural inertia offers investors little justification to price in a decisive regime shift from bullish to bearish dominance. That said, a high-impact surprise next Wednesday remains on the tail-risk radar.

Momentum Ebbs, but Medium- to Long-Term Floor Remains Rock-Solid_1

Technical Analysis

From a technical perspective, the gold continues to churn just below record highs.

Momentum gauges remain aligned with the prevailing bullish narrative. During the day, although a pullback has unfolded, no broad-based liquidation has yet materialized. For prospective shorts, the constructive cue is that the downward revisions in both PPI and payrolls failed to propel gold through the USD 3,700 resistance.

This suggests that, before any sustained break of the 3,700 handle, a retracement toward the USD 3,575 support cluster is the higher-probability path.

Conversely, if bullish impulse re-engages, a print of new all-time highs would require a decisive close above USD 3,700—a scenario most likely catalyzed by either an escalation in geopolitical tail-risk or a material downside surprise in next month’s U.S. CPI print.

Trading Recommendations

Trading Direction: Buy

Entry Price: 3626

Target Price: 3850

Stop Loss: 3567

Valid Until: September 26, 2025, 23:55:00

Support: 3607/3561/3544

Resistance: 3644/3646/3660

Risk Warnings and Disclaimers

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Eva Chen

Forex

Central Bank

Summary:

Japan’s CGPI accelerated to a 2.7% YoY pace in August, while the rate of decline in import prices continued to moderate.

BUY USDJPY

Close Time

CLOSED

147.122

Entry Price

151.800

145.890

154.900 -0.445 -0.29%

14.0

Pips

Profit

145.890

147.262

Exit Price

147.122

Entry Price

151.800

Fundamentals

Recently, USDJPY has experienced heightened volatility. Since printing a cycle low at 139.89 on 22 April 2025, the pair has remained confined within a four-month-plus "rising-wedge" formation.

On Monday, USDJPY rallied as much as 0.8% to an intraday peak of 148.59, yet the entire move has since been retraced. By Thursday the quote was effectively unchanged at 147.98.

Market participants have largely looked through the political noise stemming from Prime Minister Ishiba’s resignation, instead focusing on variables that could alter the Bank of Japan(BoJ)’s current trend of monetary-policy normalisation.

Thursday’s release showed Japan’s August Corporate Goods Price Index (CGPI) edging up to a 2.7% YoY pace from 2.5% in July, in line with consensus. The uptick was driven primarily by food & beverage prices, which accelerated to 5.0% YoY (prev. 4.7%). Utility charges, cushioned by government subsidies, fell 2.9% YoY, mitigating the headline impulse.

Import-price deflation narrowed markedly for a second straight month: yen-denomitated import prices declined only 3.9% YoY versus a revised –10.3% drop in July. The data signal that, while domestic food inflation remains sticky, external cost pressures are now stabilising.

All told, the shifting fundamental backdrop is likely to exert upward pressure on the JPY.

Inflection Point Looms, Yet Range-Bound Dynamics Prevail_1

Technical Analysis

The intraday bias of USDJPY stays neutral. The pair is expected to consolidate above 146.29. As long as 149.12 caps on a closing basis, upside risk remains dominant. Conversely, a sustained break below the EMA55 (currently 147.15) would confirm completion of the 139.87 rebound—already tracing out a clear three-wave advance to 150.90—and open the door to a deeper corrective leg.

Trading Recommendations

Trading Direction: Buy

Entry Price: 149.19

Target Price: 151.80

Stop Loss: 145.89

Valid Until: September 26, 2025, 23:55:00

Support: 146.85/145.86/145.21

Resistance: 149.19/150.97/151.32

Risk Warnings and Disclaimers

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Warren Takunda

Traders' Opinions

Summary:

The U.S. dollar fell sharply against the Japanese yen on Thursday, retreating below 147.50 after U.S. inflation data reinforced expectations of prolonged monetary policy easing, with technical signals pointing to further near-term weakness before any potential rebound.

SELL USDJPY

Close Time

CLOSED

147.000

Entry Price

145.300

148.300

154.900 -0.445 -0.29%

42.2

Pips

Profit

145.300

146.578

Exit Price

147.000

Entry Price

148.300

The U.S. dollar suffered a sudden reversal against the Japanese yen on Thursday, giving up earlier gains after fresh U.S. inflation data prompted renewed selling pressure across the greenback. The move underscored fragile sentiment surrounding the Federal Reserve’s policy outlook and highlighted how quickly positioning can shift when traders recalibrate rate expectations.

After briefly climbing above the 148.00 handle in the Asian session, USD/JPY staged a dramatic U-turn and slipped into negative territory, falling as low as 147.35 by the European afternoon. The decline marked a 0.1% drop on the day, but the reversal carried more weight than the headline change, as the pair’s failure to hold above a psychologically important resistance level reignited bearish momentum.

The catalyst came from the U.S. Consumer Price Index (CPI) report for August, which showed annual inflation accelerating to 2.9% from 2.6% in July. While the data confirmed that price pressures remain sticky, markets interpreted the details as insufficient to alter expectations for rate cuts later this year. The Fed’s challenge remains balancing a steady disinflation trend with signs of cooling growth, and investors appeared convinced that policymakers will prioritize supporting the economy rather than risking overtightening.

The softer dollar response contrasted with earlier expectations that firmer inflation would provide support. Instead, Treasury yields slipped modestly, and rate-sensitive currencies like the yen gained ground. The shift reflects how markets are increasingly looking beyond headline inflation, focusing instead on the Fed’s broader narrative that restrictive policy has largely run its course.

Technical Analysis

From a technical perspective, the outlook for USD/JPY has tilted bearish in the short term. The pair’s retreat coincided with a break below a trendline near 147.40 on lower intraday charts, erasing the momentum built earlier this week. With the 50-day exponential moving average (EMA50) acting as overhead resistance, the probability of a sustained recovery appears limited in the near term.

Momentum oscillators add weight to the downside case. The Relative Strength Index (RSI), which had previously been hovering in overbought territory, has turned lower, signaling waning buying pressure and reinforcing the likelihood of further corrective moves. We are now eyeing the 146.80 zone as the next key support level. A decisive break below that threshold could open the door to deeper losses, though short-term rebounds remain possible as markets digest the inflation-driven move.

Still, medium-term bulls have not completely relinquished control. Should the pair find strong buying interest near 146.80, a recovery back toward the 149.00 region remains plausible. That level has served as a magnet for price action in recent weeks, with traders reluctant to push the yen significantly higher amid Japan’s ongoing ultra-loose monetary stance.

TRADE RECOMMENDATION

SELL USDJPY

ENTRY PRICE: 147.00

STOP LOSS: 148.30

TAKE PROFIT: 145.30

Risk Warnings and Disclaimers

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Warren Takunda

Traders' Opinions

Summary:

The U.S. August CPI met expectations at 2.9% YoY while jobless claims jumped unexpectedly, fueling speculation of three Fed rate cuts before year-end.

BUY AUDUSD

Close Time

CLOSED

0.66499

Entry Price

0.68000

0.65800

0.66440 +0.00057 +0.09%

12.8

Pips

Profit

0.65800

0.66627

Exit Price

0.66499

Entry Price

0.68000

The Australian dollar staged a strong rebound against its U.S. counterpart on Thursday, as investors digested a mixed batch of U.S. economic data that simultaneously confirmed persistent inflation and revealed unexpected softness in the labor market. The AUD/USD pair, which had dipped to 0.6590 earlier in the session, reversed course and pushed back toward intraday highs around the 0.6630 level.

The Bureau of Labor Statistics reported that headline U.S. Consumer Price Index (CPI) inflation rose 2.9% year-over-year in August, in line with market expectations and a modest acceleration from July’s 2.7%. Core CPI, which strips out food and energy, held steady at 3.1%, also matching consensus. On a monthly basis, inflation rose 0.4%, sharply higher than the prior 0.2% and above the 0.3% anticipated.

While inflation remains above the Federal Reserve’s 2% target, the report was not seen as alarming. Market reaction instead turned decisively after a surprise jump in U.S. Initial Jobless Claims. The number of Americans filing for unemployment benefits surged to 263,000 in the week ending September 6, well above both the previous week’s 236,000 and consensus forecasts of 235,000. The figure, the highest since mid-July, suggests that cracks are beginning to appear in what has been a resilient labor market.

For investors, the combination of inflation aligned with expectations and labor data pointing to weakness reinforced the belief that the Federal Reserve is ready to accelerate its pivot toward easing. Futures markets are now fully pricing in three rate cuts before the end of the year, one at each of the Fed’s remaining policy meetings. This aggressive repricing pressured the U.S. dollar, while equity markets rallied sharply on the prospect of looser financial conditions.

The greenback’s pullback offered breathing room for the Australian dollar, which earlier in the day had come under pressure from domestic data. Australia’s September Consumer Inflation Expectations rose to 4.7% from 3.9%, suggesting households expect price pressures to intensify. While the data supports the Reserve Bank of Australia’s cautious stance, it also raised concerns about sticky inflation eroding real incomes. Initially, this weighed on the Aussie, but broader U.S. dollar weakness quickly overshadowed the domestic release.

Technical Analysis

From a technical perspective, AUD/USD has displayed resilience near key support zones and is once again challenging a familiar ceiling around 0.6620–0.6630. The pair had initially slipped after failing to breach this barrier in earlier trading, but Thursday’s rebound signals renewed bullish momentum.

The Relative Strength Index (RSI), which had entered overbought territory earlier in the week, has reset lower, allowing the pair to build fresh upward traction. Positive signals are emerging, with price action now leaning on a short-term ascending trendline that has guided the rally from August lows. A decisive break above 0.665 could open the door toward the 0.6700 and 0.6800 psychological levels, while failure to hold recent gains risks a pullback toward 0.6580.

Overall, the technical backdrop favors buyers, especially as speculative flows remain biased against the U.S. dollar. However, traders should remain cautious given the heavy event risk ahead, including further Fed commentary and upcoming U.S. retail sales figures, which could reset market expectations for growth and consumption.

TRADE RECOMMENDATION

BUY AUDUSD

ENTRY PRICE: 0.6650

STOP LOSS: 0.6580

TAKE PROFIT: 0.6800

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Traders' Opinions

Summary:

Gold prices remain under pressure near $3,630 despite softer Treasury yields and a weaker dollar, with investors weighing firmer US inflation data against growing expectations of Fed rate cuts.

SELL XAUUSD

Close Time

CLOSED

3630.00

Entry Price

3580.00

3680.00

4200.58 +2.67 +0.06%

500.0

Pips

Loss

3580.00

3680.00

Exit Price

3630.00

Entry Price

3680.00

Gold (XAU/USD) remains on the back foot on Thursday, unable to build momentum despite a softer US dollar and falling Treasury yields in the wake of fresh US inflation data. The yellow metal, which briefly touched a record high near $3,675 earlier this week, is now consolidating around $3,630 per ounce and struggling to attract meaningful new buying interest. The retreat highlights investor caution ahead of a highly anticipated Federal Reserve policy decision next week, which could set the tone for bullion in the months ahead.

The latest inflation print offered a mixed picture. The US Consumer Price Index (CPI) climbed 0.4% month-on-month in August, above the 0.3% forecast and quickening from July’s 0.2% pace. On an annual basis, headline inflation held steady at 2.9%, matching expectations but marking an uptick from the 2.7% seen previously. More importantly for policymakers, the Core CPI—excluding volatile food and energy—rose 0.3% MoM and 3.1% YoY, exactly in line with consensus and unchanged from July.

The data suggest inflation remains sticky enough to prevent the Fed from easing aggressively, but not hot enough to derail the broader disinflation narrative. That nuance explains why gold has failed to extend its breakout: while inflation data reinforces the likelihood of near-term rate cuts, it also tempers the scale of market bets on deeper or faster easing.

Adding to the complexity is a stream of softer US economic readings. Recent Producer Price Index (PPI) data undershot forecasts, while the August Nonfarm Payrolls report disappointed with slower job creation and downward revisions to prior months. The unemployment rate also ticked higher, painting a picture of a labor market that is cooling more quickly than the Fed would like. Together, these releases have bolstered the case for policy easing, with futures markets fully pricing in a 25 basis-point cut next week and even leaving room for as many as three cuts before year-end.

That outlook provides a cushion for gold. Lower interest rates generally reduce the opportunity cost of holding non-yielding assets such as bullion. However, with the metal already trading near record highs, investors appear hesitant to chase prices higher until they see clearer signals from policymakers.

Gold’s performance this week illustrates the uneasy balance between short-term profit-taking and long-term structural demand. On one hand, central banks and sovereign buyers continue to accumulate gold as a hedge against currency debasement and geopolitical instability. On the other, speculative flows are increasingly tied to day-to-day shifts in Fed rate expectations, making the metal vulnerable to corrections when economic data delivers surprises.

The current price action feels less like a rejection of gold’s bullish story and more like a pause. If the Fed confirms a dovish tilt next week, a retest of $3,675 and potentially $3,700 is likely. Conversely, any indication that the central bank intends to move cautiously—or that inflation risks remain unresolved—could trigger a deeper correction, potentially back toward the $3,600 region.

Technical Analysis

On the charts, gold is showing signs of consolidation after its parabolic rally earlier this week. Prices have formed a descending triangle pattern following the sharp push to $3,674, a setup often associated with bearish continuation. The yellow metal has also retreated in intraday trading, as it searches for a higher low that could serve as a base for the next leg upward.

Momentum indicators are sending mixed signals. The Relative Strength Index (RSI) has eased from overbought conditions and is now flashing positive overlaps, suggesting that downside momentum may be fading. This supports the view that sellers are losing steam, though confirmation will require a decisive breakout from the current range.

Given the illustrated setup, traders should watch the demand zone around $3,600 closely. A break below this level could open the door for a deeper retracement, possibly toward $3,580. On the flip side, sustained buying above $3,640 would undermine the bearish triangle and shift focus back toward $3,675 and beyond.

TRADE RECOMMENDATION

SELL GOLD

ENTRY PRICE: 3630

STOP LOSS: 3680

TAKE PROFIT: 3580

Risk Warnings and Disclaimers

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Alan

Forex

Summary:

Fundamentally, both bullish and bearish factors are present, leading to a phase of market contention in the short term. However, the technical outlook remains within an upward channel, suggesting a higher probability of near-term upside.

BUY USDJPY

Close Time

CLOSED

147.965

Entry Price

151.100

146.200

154.900 -0.445 -0.29%

0.9

Pips

Profit

146.200

147.974

Exit Price

147.965

Entry Price

151.100

Fundamentals

Recently, USDJPY movements have been driven by three key factors:

Firstly, Japanese political uncertainty. The unexpected resignation of the Prime Minister and the ensuing LDP leadership transition have raised concerns over fiscal and monetary policy direction. This has temporarily weakened the yen's safe-haven appeal, putting downward pressure on the currency and driving USDJPY higher.

Secondly, gradual signals of monetary policy normalization from the Bank of Japan (BoJ). Officials have hinted at entering the "final phase" of balance sheet reduction and ETF sales. If implemented, this would be structurally bullish for the yen over the long term, though the timing and pace remain subject to political variables.

Thirdly, U.S. Treasury yields and Fed outlook. The 10-year U.S. yield has recently hovered around 4.08%, while shifting market expectations for Fed rate cuts have heightened volatility in short-term rates and dollar sentiment. A further decline in yields could weigh on the USD and support JPY against non-USD crosses.

In summary, the yen faces near-term weakness due to political shocks. However, confirmation of the BoJ's normalization path could become a critical headwind for the mid-term gains of USDJPY. Concurrently, synchronized moves in U.S. yields and the DXY may amplify directional breaks in either direction.

Technical Analysis

On the daily chart, USDJPY's recent price action shows a sequence of successively higher highs and lows, tracing out a well-defined ascending channel. This configuration implies that the near-term bias remains tilted to the upside. Within the moving-average complex, the short-term stack is aligned in a bullish sequence and the SMA144 is curling higher, reinforcing near-term upside momentum.

On the upside, USDJPY is confronted with a critical resistance at 149.00. A forceful breakout and sustained close above this level would open extension room for further upside, targeting the prior high of 150.90 and, subsequently, the upper bound of the ascending channel.

Downside risks emerge on a decisive breach of the 147.10 support. Such a move would expose the next cushion at 146.30. A break below 146.30 would confirm a bearish trend reversal in the near term.